Fibrek Inc. (TSE:FBK) (PINK:FBKZF) stock price got locked higher after another takeover bid was made with the help of government funding.
FBK gapped up 16.8% on Friday carrying a trading volume of 6 million, thirteen times the 90-day average of 446 thousand. The stock was also enlisted among the most actively traded ones on the Toronto Stock Exchange.
A demand for FBK spiked after the Quebec government took a clear position regarding the takeover of Fibrek. Reportedly the government decided to provide the loans necessary for Mercer International (TSE:MRI.U) (NASDAQ:MERC) to make a $170 million bid for the pulp producer Fibrek. The company is bidding against Resolute Forest Products (TSE:ABH) (NYSE:ABH) which had previously offered $130 million, but got the offer rejected as too low.
The most recent bid valued FBK’s stock at $1.30 per share, thus the adequate increase on the open market.
It is interesting to see that the government provided their support without asking much in return. Mercer didn’t provide any guarantees they would not lay off workers if acquisition falls through and the company would likely sell Fibek’s U.S. operations as well. Mercer was named as a preferred entity in this takeover race because of their involvement lies solely with NBSK pulp, which is in a very bullish market right now.
